A recent article in The Economist sheds some light on trends in the US housing market: America’s housing market is shuddering. It indicates that trends established during the pandemic are receding and, perhaps, reversing. For a long period, a desire for undertaxed, underregulated southern cities led to a booming housing market. That is no longer happening.
The article focuses on traditional market factors for explaining any changes.
“Prices are still creeping up in the north-east and the mid-west, but the west and, in particular, the south are hurting (see map). Pity the homeowner in Dallas or Phoenix who bought last year. They are carrying a beefy mortgage rate of 7% or so and the value of their house is already down a few percentage points in nominal terms, or more after accounting for inflation.”
“Worse, public perception of the cities has changed. Austin and Miami failed to attract enough superstar firms when they were in favour; few tech bros today tout them as the new Silicon Valley.”
“The state that fares worst of all…adds a few peculiarities of its own. It is Florida, where prices have fallen by 4% in the past year. Aziz Sunderji, an independent analyst, points to high and rising home-insurance premiums owing to climate change ($11,000 or so a year in Florida, versus $2,400 nationwide). Other reasons are a sharp drop-off in demand from rich Canadians (a surprising number of whom flee cold winters to Florida) and expensive new safety rules that came in after a condominium in Surfside, a Miami suburb, collapsed in 2021.”
The major factor in housing prices is the demand for housing. One of the seemingly safe assumptions has been that people from the cold states will continue to move to friendlier climates in the sunbelt. However, with global warming, northern regions will benefit from milder temperatures while the southern states will get ever hotter. Could we reach a point at which that trend will reverse? Consider this chart that the article provided.
At the current moment, it seems net migration to the three sunbelt states is diminishing, while the northern and western giants of New York and California are losing people at a slower rate. If these trends continue, the flow could be reversed in a year or two.
It should be noted that people considering moving to a new place face not only climate temperature gradients but also political temperature gradients. When assessing the potential quality of life in a location, local climate and local politics must both be considered, and both are changing rapidly.
There is a phenomenon that psychologists refer to as schismogenesis. It was observed when two individuals argue over an issue and in the process, with each determined to gain dominance, the argument will spread to other concerns over which there may have been no previous disagreement. David Graeber and David Wengrow, in their book “The Dawn of Everything,” observed examples of neighboring societies where each developed cultures that seemed intended to be exact opposites. One would develop a practice that would annoy or infuriate the other and the other would respond in a similar fashion. This type of relationship does not usually end well. One example posed by those authors was the ancient pair of Sparta and Athens, which eventually led to warfare. We, in the United States, seem to be splitting our population into two cultures with each found infuriating by the other. It is frightening to consider how this might end.
A response to such a situation is for each culture to collect in specific geographic locations. That is what has been occurring over the last few decades. In choosing a location, one doesn’t want to be stuck in the wrong culture.
Changing climate factors into which culture makes sense in a given location. The southern coastal states appear to be the most at risk from climate change. Increasing temperatures invite unfamiliar tropical diseases to migrate into these warmer regions. An AI query of tropical diseases invading the southern US provides these examples: Chagas disease, Leishmaniasis, Melioidosis, Dengue fever, and Chikungunya. As these invasions develop, the favored administration in these regions is attacking vaccines and vaccine science, implying that vaccinations are dangerous and science can’t be trusted. Past diseases assumed long gone are beginning to reappear as vaccination rates fall. Those of us who predate polio vaccines remember the fear that spread through families each summer during the polio season, and how grateful we were for the vaccine. Some attitudes make no sense, but they do infuriate political opponents.
Temperatures are rising and the favored administration in the south is determined to keep them rising by supporting fossil fuel consumption over the development of carbon free energy sources. If this trend continues it is possible that our children will see a day when southern Florida is underwater and most of the Gulf coast is as well.
It is best to think carefully when considering a location
in which to live. Current housing price
is not the only consideration.
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